Yancoal Australia is acquiring an 80 per cent stake in the Kestrel coal operation in Central Queensland for up to $3.37 billion ($US2.4 billion).

Yancoal chief executive officer Sharif Burra said the deal represented a strong strategic fit for Yancoal and added a high-quality, long-life mine to its portfolio.

“Kestrel delivers increased scale and diversification to Yancoal’s portfolio and is expected to contribute premium metallurgical coal into our product mix,” he said.

“The acquisition positions us to deliver greater value to our shareholders and consolidates Yancoal’s position as a leading Australian coal miner.

“We look forward to working closely with Mitsui, the joint venture partner and owner of 20 per cent of Kestrel, in the future as co-owners of Kestrel to continue to add value to the mine, local communities and stakeholders.”

Yancoal has interests in a string of coal mines in Queensland, New South Wales, and Western Australia including Yarrabee, Middlemount, Cameby Downs, Mount Thorley Warkworth, Ashton, Hunter Valley Operations, Moolarben and Premier.

The Kestrel deal includes an upfront cash consideration of $US1.85 billion and a further $US550 million payable over a five-year period subject to coal price thresholds.

Kestrel is the largest producing underground coal mine in Australia, clocking up saleable production of 5.9Mt last year, and has a 25-year mine life.

The hard coking coal mine, 40km north-east of Emerald, was purchased from Rio Tinto by EMR Capital in 2018.

The vendors in the Yancoal deal are listed as EMR Capital Advisors, Kestrel Coal (EMR), EMR Capital Management and Adaro Capital.

Completion of the acquisition is subject to satisfaction of conditions precedent including regulatory approvals. Completion is targeted towards the end of Q3 2026.